Multinational consumer giants like Unilever Plc and Nestle SA typically trade at a discount to their Indian units, given the nation\u2019s growth potential. They\u2019ve become even cheaper after the selloff, prompting Credit Suisse to ask if stock values of their local subsidiaries will follow suit.<\/p>\n
\u201cMany large European and U.S. consumer staple stocks have fallen about 15% from their peak last year,\u201d Arnab Mitra, an analyst at the brokerage, wrote in a note on Friday. \u201cIndian consumer stocks that followed global peers on the way up have not seen a correction.\u201d<\/p>\n
For instance, Hindustan Unilever Ltd.\u2019s valuation premium over its Anglo-Dutch parent is significantly above the 10-year mean, which wasn\u2019t the case even three months ago, the analyst wrote. Unilever\u2019s one-year forward price-to-earnings ratio has dropped 20% from its peak of 23 times, while its Indian subsidiary is valued at a multiple of 55.<\/p>\n
Nestle India Ltd. trades at a trailing price-earnings ratio of 60.3 times, almost twice that of its Switzerland-based parent whose shares have tumbled 9% this year.<\/p>\n
The rich valuations are being supported by management commentary about a rebound in rural consumption, Mitra said. This optimism could be cushioning the fall in valuations, for now, he said. Prime Minister Narendra Modi\u2019s shock cash ban in late 2016 damped farm incomes, while the roll out of the nationwide sales tax in July disrupted supply chains.<\/p>\n","protected":false},"excerpt":{"rendered":"
Multinational consumer giants like Unilever Plc and Nestle SA typically trade at a discount to their Indian units, given the nation\u2019s growth potential. They\u2019ve become even cheaper after the selloff, prompting Credit Suisse to ask if stock values of their local subsidiaries will follow suit. \u201cMany large European and U.S. consumer staple stocks have fallen […]<\/p>\n","protected":false},"author":1,"featured_media":24586,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[410],"tags":[],"class_list":["post-24585","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/24585","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/comments?post=24585"}],"version-history":[{"count":1,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/24585\/revisions"}],"predecessor-version":[{"id":24587,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/24585\/revisions\/24587"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/media\/24586"}],"wp:attachment":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/media?parent=24585"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/categories?post=24585"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/tags?post=24585"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}